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Princeton's Sims presented with Nobel Prize in economics

Posted December 12, 2011; 06:00 p.m.

by Martin Mbugua

Princeton University professor Christopher Sims accepted his Nobel Prize in economics Dec. 10 during a ceremony at the Stockholm Concert Hall in Sweden. The prize was awarded to Sims along with Thomas Sargent, a New York University economist and visiting professor this semester at Princeton, for developing tools to analyze the economic causes and effects of monetary policy.

Sims, who is Princeton's Harold H. Helm '20 Professor of Economics and Banking, has been a faculty member at Princeton since 1999, and is the third tenured faculty member at Princeton to win the Nobel Prize in economics in the past decade. He and Sargent are longtime colleagues, and are currently teaching partners for a graduate course at Princeton. Their work has revolutionized the field of macroeconomics and how it is applied by central banks and governments around the world.

"Thank you for recognizing the many women and men like us who use statistics and economic theory to understand how governments and markets can improve peoples' lives," Sargent said in a speech that he gave on behalf of both winners during a banquet in Stockholm City Hall following the presentation ceremony.

Sims delivered his prize lecture, "Statistical Modeling of Monetary Policy and Its Effects," on Dec. 8 at Stockholm University. Advocating for "serious probability-based policy modeling," his lecture focused on work done in the 1930s by Jan Tinbergen, a Dutch economist who in 1969 received the first Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

Using historical data about economic events, Sargent and Sims have independently worked to develop and critique models that seek to analyze the cause and effects of monetary policy. The laureates' work has been largely based on the U.S. economy and has provided consistent results when applied to other economies.

Sims joins two other tenured Princeton faculty members who have received a Nobel Prize in economics in the last decade, following Paul Krugman in 2008 and Daniel Kahneman in 2002. In total, 13 members of the current Princeton faculty (including emeritus and visiting professors) are recipients of the Nobel Prize. Sims is the ninth Princeton faculty, staff member or alumnus to be awarded a Nobel in economics.

Sims and Sargent, who are among 13 Nobel laureates this year, share the award of 10 million Swedish kronor (currently $1.5 million). At the prize award ceremony in Stockholm, the Nobel laureates received a diploma and a medal from King Carl XVI Gustaf of Sweden. More information about the award events is available on the Nobel Prize website.